THE FARMERS' REGISTER. 



331 



of debtors. Such could not be lli« case, unless ) 

 indeed in regard lo persons i)crn)iiled to be iin- | 

 properly and unjusiiiiably indebted ; and this pub- I 

 liciiy would etlectualiy, in I'uiuie, prevent abutsen > 

 ol' this kind ; the [)erniit(in«r of wliu-h lias served 

 ol'ien 10 ruin such lavored debtors themselves, as 

 well as inducing injustice to other applicaiiis lor ^ 

 discounts, and causing great losses to the banks, 

 and great injury to public inleresis, habits and 

 morals. It would be only such injudicious or 

 ependlhrift borrowers who could have any 

 reason to object lo the most |)ublic exhibition ol 

 their discounts. The magnitude of the discounts 

 ol' sale debtors and judicious mercliants, instead 

 of being injurious to their mercantile credit, would 

 have the oppotsite operation. For they would be 

 an indication of the large amount of their busi- 

 ness and their profits ; and not of their necessi- 

 ties or necessary embarrassments — as many ol 

 the existing long standing ''accommodations" 

 would show of many other debtors of diHereni 

 character. 



•5. A saltiguaid againt banking fraud, and sus- 

 pension of piyments, would be to reejuire that 

 all debts due Iroin a bank, whether lor deposiie.- 

 or otherwise, should be payal)le in specie, if the 

 bank prolessed to pay specie ; and when in a 

 state of " suspension," and not paying specie, nor 

 |)rolessing to pay it, that all such dues should be 

 paid in the noies of the particular bank, or branch. 

 This regulation would restrain the present gene- 

 ral and efieciually evasive procedure of the banks, 

 which enables them to avoid paying specie, even 

 when prol'essina to pay. By the pievniling e\s- 

 tem of receiving Ibreign notes of non -specie paj- ; 

 ing banks on deposite, and issuing only such notes, ' 

 and so managing as to remove all iis own notes ; 

 (by exchanginii them with other banks or bran- j 

 dies,) to disiant circulation — and by claiming lo I 

 pay all checks in " current, bank notes," that is, I 

 in the worst kinds of loreign notes which the | 

 bank may choose to receive on deposite, (or ihe j 

 very purpose of eHecting the evasion — ) by ilie:?e j 

 paliry and scandalous tricks, the bank is ellec- ] 

 lually guarded liom being compelled to pay spe- 

 cie to any considerable extent, even when pro- 

 lessing to comply wiih the obligation ; and aloo 

 from the necessity of issuing its own notes, when 

 reliisiog to pay specie, and thereby being madesub- 

 ject to such penalty lijr the refusal as may be re- 

 quired by law. If a bank suspends payment. 

 It should at least be subject to such penally (or 

 the suspension as the law had imposed, and the 

 bank had chosen as an aliernaiive prelerable lo 

 paying specie. This is all iliat is sought to be 

 secured by this particular measure of reform. It 

 is manifest that by the now general tricks ol 

 evasion, (tricks, which if resorted to by an indi 

 vidual, would stamp him with the character of a 

 desperate and shameless bankrupt, if not worse,) 

 the legal obligation of a bank to pay specie is 

 made nugatory, and also the penalties lor refusing 

 to pay. At this lime, and for years past, il' any 

 of the community had dared to put in force the 

 slight and almost nominal penalty on the bank 

 for refusing lo pay specie, there would be Ibund 

 scarcely any means to do so. For; by their sys- 

 tem of receiving foreign and other than their own 

 notes in deposite, for the very purpose of paying 

 out such notes exclusively, it is scarcely possible 

 to find a note of any particular bank in circula- 



tion, in its own town, or the neighboring country. 

 1 1' there were any just ground to complain ot' 

 hardship in the restriction here proposed, (that 

 is, of all such notes as a bank chooses to receive 

 and to le-issue being placed on ilie liioiing ol its 

 own notes,) the banks can easily avoid the ope- 

 ration of the rule by refusing to receive such 

 notes as deposiies, or, if receiving, by reluming 

 them to the banks, by which they weie issued.* 



6. This plan ol partial reform would not al- 

 ways prevent, though it would render much less 

 frequent and injurious, the occurrence of bdiik 

 suspensions o! payment ; and neither would we 

 require (as ought to be part of any thorough re- 

 lorin) the closing of a hank, as bankrupt, upon 

 iis stopping payment. But there surely ought to 

 be infiicied on every suspending bank some ge- 

 neral and truly operative penalty, heavy enough, 

 at least, to prevent the banks Horn reaping any 

 profit Ironi their suspension, and the cunsecjuent 

 depreciation of their pajier money — which will 

 always be the result, wiihoul some such efiectual 

 priialties. Theexisnng law ol North Carolina 

 allows to the holders ol notes on which payment 

 has been refused (and the penalty required by 

 the holders,) 12 per cent, inieiesl aqd damages 

 (hereon ; and this penalty has not yet been lound 

 ol much effect, in any way, nor is it often put in 

 Ibrce. But this, or even 10 per cent, interest, 

 might be sufficient lor the particular object in 

 view, if in connexion with, and aided by, the 

 oiher previously mentioned requisitions ol this ~ 

 plan ol partial reform. 



7. The greaiest measure of partial reform, in 

 the removal of the great abuse which is the Iruit- 

 lul and uniailiiig source and subsequent support of 

 all other minor abuses, is yet to be presented. 

 This abuse is the exisiing partnership of the state 

 of Virginia and the banks. This partnership must 

 he dissolved, and the stale must cease to exercise 

 (lor its designed and supposed profii, but really to 

 i:s great loss and injury, on every score,) the trade 

 of banking, and cease lo be interested at all, much 

 les* to the amount of nearly half of all the capi- 

 tal of the banks of circulation, belore any great 

 relorm to the banking system can possibly be el- 

 lecied. In proposing this particular measure of 

 reliDrra, we can merely reler thus generally and 

 concisely to the great abuse which it would re- 

 move. For to discuss and thoroughly expose all 

 the abominations of the state's being a large bank- 

 ing stockholder, and the consequenl intimate con- 

 nexion of bank and state, would alone require 

 more space than can be here given to the whole 

 subject. Even if considered in the partial and 

 very limited view of pecuniary profit to the trea- 

 sury, we are satisfied that the entire destruction, 

 without any compensation, of all the common- 

 wealth's iuieresi in ihe banks, would ultimately 

 operate as a gain instead of a loss to the public 

 wealth. When the commonwealth of Virginia 

 is no longer a stockholder in the banks, nor generai 

 surety for their solvency, then, and not until then, ^ 

 will legislation on banking be directed liar the pub- 

 lic benefit, instead of, as now, and heretofore, for 

 the exclusive benefit of the banking interest. 



* This now general syslem of operations by banks 

 falsely professing to pay specie, which is but slightly 

 referred to above, wa3 fully stated and exposed in a 

 distinct article at page 163 vol. 9 of the Farmers" Re- 

 gister. • 



